Buy Rating Affirmed for Alignment Healthcare Amid Strong Q1 Performance and Positive 2024/2025 Outlook

Goldman Sachs analyst Nathan Rich has maintained their bullish stance on ALHC stock, giving a Buy rating on April 23.

Nathan Rich has given his Buy rating due to a combination of factors including Alignment Healthcare’s (ALHC) stronger than expected financial performance in the first quarter of 2024, and promising outlook for both 2024 and 2025. In the first quarter, ALHC reported an adjusted EBITDA loss that was narrower than anticipated, thanks to a significant year-over-year increase in membership, higher revenue, and a lower medical benefit ratio (MBR), which measures healthcare costs as a percentage of premiums. Although there were increased expenses in selling, general, and administrative (SG&A) categories, the positive developments outweighed these costs.

Additionally, the company’s guidance for 2024 revenue has been increased to reflect the surge in new members. With medical costs remaining under control and expected improvements in MBR throughout the year, particularly from engaging high-risk members, the outlook is optimistic. Looking ahead to 2025, the potential for membership growth above 20% and margin improvements is highlighted by market opportunities in California. ALHC’s long-term EBITDA margin targets remain unchanged and are backed by robust modeling, reinforcing the rationale behind the Buy rating.

Rich covers the Healthcare sector, focusing on stocks such as Humana, Centene, and Idexx Laboratories. According to TipRanks, Rich has an average return of 0.5% and a 46.03% success rate on recommended stocks.

In another report released on April 23, Stifel Nicolaus also maintained a Buy rating on the stock with a $9.00 price target.

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Alignment Healthcare (ALHC) Company Description:

Alignment Healthcare Inc is a next-generation, consumer-centric platform that is revolutionizing the healthcare experience for seniors through Medicare Advantage plans. These plans are marketed and sold direct-to-consumer, allowing seniors to select the manner in which they receive healthcare coverage and services on an annual basis.